FIELD STUDY REPORT         ­  MARKETING THEORY AND PRACTICE  (561)

1. INTRODUCTION

In   this   Field   Study   Report   I   have   written   about   the   “Market 

Segmentation”,   and   discussed   their   theoretical   aspects.     For   the 

purpose   of   field   research   I   have   selected   and   visited   a   business 

organization namely ABM Data Systems (Pvt) Limited and seen their 

accounting   system.     I   have   also   included   in   this   Report   my 

observations and recommendations about their market segmentation.

1.1 MARKET

A  Market  consists  of  all  the  people  and/or organizations   who 

desire   a   good   or   service,   have   sufficient   sources   to   make 
purchase, and are willing and able to buy.  

1.2 MARKETING

Marketing can be defined as a system of activities designed to 
plan,  price,  promote and  distribute  products  and/or  services, 
which  satisfy needs  and  wants  of  the  consumers,  in  order to 
achieve   organizational   objectives.     In   broader   sense   the 
anticipation, management and satisfaction of demand through 
the exchange process is called marketing.

Marketing   stimulates   consumers,   costs   a   large   part   of   sales, 

employs people, supports industries, affects all consumers and 
play a major role in daily lives.

It   is   clear   from   this   definition   of   marketing   that   the   basic 

purpose of marketing helps ­

• to achieve the organization’s goals;
• to satisfy consumers; and
• to provide desirable goods, services ideas.

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To earn profit as well as other objectives are goals of marketing. 
Therefore, the notion of profit is included directly or indirectly in 
every definition of marketing.

In   marketing   all   activities   of   the   organization   would   become 

customer­oriented.   This   is   to   say   that   the   company   would 
identify   what   customers   need   and   want   and   tailor   all   its 
activities to satisfy those needs and wants efficiently, effectively 
and profitably.

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2. MARKET SEGMENTATION

2.1. WHY MARKET SEGMENTATION

A major key to a company’s success is its ability to select the 
most   appropriate   market   segmentation   because   a   company 
cannot   target   whole   market.   There   are   general   guidelines   for 
selection of target markets:

• Target market should be compatible with the organization 
goals and image.

• The   target   market   should   match   the   marketing 

opportunity with the company’s resources.

• An organization should consciously seek markets that will 
generate a sufficient sales volume at a low cost to result 
in a profit.

• A company should select a market wherein the number of 
competitors and their size are small.

The   total   markets   for   many   products   is   to   varied­too 

heterogeneous.     This   variation   Is   due   to   the   differences   in 
buying habits ways to use the products motives for buying etc. 
Market segmentation takes these difficulties into account.

2.2 WHAT IS MARKET SEGMENTATION

Market segmentation is a process of dividing the total market for 
a product into several segments.  Management has to select one 
or   more   of   these   market   segments   for   marketing   of   their 
products   and   services.   Further   a   separate   marketing   mix   is 
developed for each segment or group of segment in this target 
market.  So we can say that market segmentation means to sub­
divide the total market for a good or service into smaller groups 
or segments so that the organization may focus on a particular 
segment.   Market   segmentation   allows   a   firm   to   focus   on   a 

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particular   segment   of   buyers.   This   technique   is   particularly 

useful for smaller firms which do not have enough resources to 
compete   with   their   larger   counterparts.   For   example,   a 
manufacturer of shoes may focus its attention on ladies’ shoes 
only. This would, of course, reduce its target market, but would 
enable   it   to   compete   and   even   give   an   edge   over   larger 
competitors.

Larger firms use market segmentation to address to the needs 
of   different   buyers.   For   example,   a   large   manufacturer   of 
clothing may classify its market by gender (clothes for men and 
women),   by   age   (clothes   for   new­born,   kids,   youngsters,   and 
grown­ups), by life style (clothes for conservative people, and for 
liberal   people   etc.)   or   by   climate   (clothes   for   summer,   winter, 
and   moderate   weather).   Such   segmentation   would   allow   the 
firm to individually address to each category of buyers.

2.3 STEPS INVOLVED IN SEGMENTATION:

The   steps   involved   in   segmenting   a   market   in   an   organized 

fashion are:

• Identify the current and potential wants that exist within 
a market ­ to determine the specific needs being satisfied 
by current offering.

• Identify   the   characteristics   that   distinguish   among   the 

segments   ­   what   prospects   have   in   common   that 
distinguishes   them   from   other   segments   with   different 
wants?

• Determine   who   has   each   want   ­   to   estimate  how   much 

demand or potential sales each segment represents.

2.4 BENEFITS OF MARKET SEGMENTATION.

• Better marketing job and efficient use of marketing resources.

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• Small firm with limited resources can compete effectively in 
one or two market segments.

• A company can design products that really match the market 
demands .

• Advertising media can be used more effectively toward each 
segment of market.

2.5 DRAWBACKS   OF   MARKET   SEGMENTATION   UPTO   SOME 

EXTENT.

• It   is   an   expensive   proposition   in   both   the   production   and 

marketing of products.

• Segmentation increases marketing expenses in several ways 
i.e.   Inventory   cost   goes   up,   advertising   cost   goes   up, 
administrative expense goes up.

2.6 CONDITIONS FOR EFFECTIVE SEGMENTATION.

• Characteristics   used   to   categorize   customers   must   be 

measurable and the data must be obtainable.

• The   marketing   segment   should   be   accessible   through 

existing   marketing   institutions   like   middlemen,   sales   force 
with minimum cost.

• Each segment should be large enough to be profitable.

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2.7 BASIS FOR MARKET SEGMENTATION.

The first step towards segmentation of market is to divide 
the market into following two categories

• Ultimate Consumers that buy goods and services for 
their own use; and

•  Business users that buy goods and services to resell, 
or   to   use   in   their   organization   or   to   make   other 
products.

2.7.1 ULTIMATE CONSUMERS:

The basis for segmentation of consumers’ market are:

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•  Demographic
•  Geographic
•  Psychographic
•  Buying behaviour

Consumer demographics are objective and quantifiable 
population characteristics.   They are easy to identify, 
collect, measure and analyze.  They include population 
size,   gender   and   age,   marital   status,   education, 
income, etc.  Most organizations segment their market 
on demographic basis such as age (child, young, old) 
sex   (male   and   female)   Income   (rich,   middle   poor) 
education (under matric, matriculate, college graduate) 
Occupation   (Doctor   clerk   students)   Religion   (Muslim, 
Hindu). Ethnic background (Americans, Hispanic) and 
family   life   cycle   (young   single,   young   married,   old 
married with children).

Geographic  which   is   basic   identifiable   characteristic 

based on location, region, town and cities, etc., where 
consumers live and work.  Many organizations segment 
their market on some geographical basis such as region 
(Punjab Sindh) city size (Karachi & Lahore) urban rural 
and climate (hot and cold) .

Psychographic ­ This type of segment can be described 
on the basis of social and psychological factors such as 
life style, values, personality, etc.   A few organizations 
segment their market on Psychographic basis such as 
social   class   (upper   class,   middle   class,   lower   class) 
personality (self­confident aggressive, sociable) life style 
(conservative, liberal, straight).

Buying behaviour ­  based on the benefits desired from 
a product and the rate at which the consumers uses 
the product.  Some organizations segment their market 
on the basis of a consumer behavioural characteristics 
related to the products such as benefits desired (good 

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taste, low price bright teeth) and usage rate (light user, 
heavy user).

2.7.2 BUSINESS USERS:

They   buy   installations,   raw   materials   and   semi­

furnished materials.   They often buy on the basis of 
specifications,   use   joint   decision   making,   lease 
equipment   and   use   binding   and   negotiations.     Their 
demand   is   generally   derived   from   that   of   their 
consumers and can be quite cyclical.   Business users 
are   fewer   in   number   and   more   geographically 
concentrated.     These   are   classified   by   area   of 
specialization, size and resources, location and goods 
and services purchased.

Some   of   the   characteristics   and   their   basis   for 

segmentation are:

CUSTOMER  LOCATION  ­   Business   markets   are   frequently 

segmented on a geographic basis i.e., based on region 
and locations so that minimize shipping costs.

Customer   type   ­   Business   markets   are   some   time 

segmented on the basis of customer size, industry and 
organization structure.

Transaction   conditions   ­   The   circumstances   of   the 

transaction   can   also   be   a   basis   for   segmenting   a 
market   such   as   buying   situation,   usage   rate, 
purchasing   procedure,   order   size,   service 
requirements.

2.8 STUDY   OF   MARKETING   ENVIRONMENT   FOR   MARKET 

SEGMENTATION

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Study  of   marketing  environment   for  “Market  Segmentation”   is 

essential   because   various   environmental   forces   influence   its 
activities.     Study   of   these   factors   determine   an   organization’s 
level of success or failure in reaching its objectives.

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Before   taking   any   decision   about   “market   segmentation” 

management   should   set   up   a   system   for   environmental 
monitoring   through   a   process   of   gathering   and   analyzing 
information about external environment and the forecasting the 
impact of whatever trends the analysis suggests.  

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The above six variables of external macro­environment are inter­
related   and   have   considerable   influence   on   marketing 
opportunities and activities.  These are described in some detail 
as under:

2.8.1 DEMOGRAPHICS:

Demographics   are   the   statistics   that   describes   a 

populations.     Their   popular   characteristics   include 
age,   gender   family   life   cycle,   education,   income   and 
ethnicity.     Organizations   need   to   understand   these 
consumer   characteristics.     These   characteristics   of 
demographic   factors   influence   marketing   programme 
through   their   proportional   or   disproportional   change 
in each characteristics with rise and fall.

2.8.2 ECONOMIC CONDITIONS:

The   rate   of   growth   in   the   country’s   economy,   which 

can be studied by reviewing yearly change in the Gross 
National Product (GNP), can have a significant impact 
on   an   organization’s   marketing   efforts.     Other 
economic   related   factors   are   current   and   anticipated 
stage   of   the  business   cycle,   information   and   interest 
rates that influence marketing programme.

2.8.3 COMPETITION:

This   is   also   one   of   the   influence   factors   because   a 

company’s competitive environment is major in its kind 
and   often   affects   marketing   efforts   and   success   in 
attracting   a   target   market   because   one   organization 
sells a good or service and has control over marketing 
in a monopoly.   These are three types of competition. 
First   type   comes   from   marketers   of   directly   similar 
products.     Second   is   substituted   products   which 
satisfies the same need and last is more general type 

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of competition.

2.8.4 SOCIAL AND CULTURAL FORCES:

These   refers   to   quick   change   in   the   consumers   life­

style, their values and beliefs that is the way in which 
a   person   lives   and   spends   time   and   money.     It   is   a 
function   of   the   social   and   psychological   factors 
internalized   by   that   person,   along   with   his   or   her 
demographic background.  Some socio­cultural trends 
are (i) changing gender roles  (ii) a greater premium on 
time and (iii) added emphasis on physical fitness and 
health.

2.8.5 POLITICAL & LEGAL FORCES:

Some legislation seek to maintain a “level playing field” 
for   all   competitors   by   prohibiting   organizations   from 
using   marketing   practice   that   unfairly   injure 
competitors.  Some laws protect consumers rights and 
restricts   certain   marketing   activities.     The   political 
environment often affects legislation which are always 
discussed before their enactment.   Besides, monetary 
and   fiscal   polices   and   Government   relationship   with 
industries   are   also   categories   of   these   forces   which 
affecting market.

2.8.6 TECHNOLOGY:

Technology   includes   development   and   use   of 

machinery, products and processes.   Its advancement 
is costly and required employees training.   Therefore, 
technological   breakthroughs   affect   markets   by   cost 
and also starting new industries, radically or virtually 
destroying existing industries and stimulating markets 
& industries not related to the new technology.

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3. INTRODUCTION TO THE ORGANIZATION

I have selected ABM Data Systems (Private) Limited, for my study in 
this report. ABM Data Systems was incorporated as a private limited 
company   in   January   1983   in   Pakistan.     Its   Registered   Office   is 
situated at Karachi.  Its promoters belongs to an established business 
house   of   Pakistan   namely   International   Industries   Limited   (IIL).   In 
1985,   ABM   established   a   regional   office   at   Islamabad,   and   later 
another regional office was opened at Lahore. Now, ABM is a leading 
firm in computer industry of Pakistan with over 150 employees and a 
customer base of over 5000 sites, which includes many well­reputed 
organizations.

3.1 OBJECTIVES AND FUNCTIONS

The   basic   objective   of   the   company   is   to   offer   computer 

hardware, software, and consultancy solutions and services to 
the   organizations   and   individuals.   In   particular,   the   following 
objectives and functions have been established:

• Sale of mini, micro, and laptop computers.

• Sale   of   peripheral   devices   like   printers,   plotters, 

scanners,   compact   disk   drives,   digitizers,   tape 
drives, video projectors/display systems etc.

• Sale   of   computer   accessories   like   upgrading 

products, networking and communication products.

• Sale   of   computer­related   consumable   items   like 

ribbons,   ink   cartridges,   toners,   diskettes,   tape 
cassettes etc.

• After   sales   service   of   computer   equipment   to   the 

customers.

• Walk­in repair service.

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• On call repair and maintenance services.

• Networking   services   (Local   Area   and   Wide   Area 

Network design, installation, and maintenance).

• Upsizing and downsizing services.

• Data acquisition and control services.

• Training   in   standard   software   packages   and 

systems.

• Software consultancy and development services.

3.2 LOCATIONS OF OFFICES

ABM has three offices in the country, viz. Karachi, Lahore, and 
Islamabad. The addresses of these offices are as below:

Head office: ABM Data Systems (Private) Limited
197/5, Ground Floor
Pakistan Red Crescent Building
Dr. Daudpota Road
Karachi.

Branch offices: ABM Data Systems (Private) Limited
Ghani Chambers
Link McLeod Road
Lahore.

ABM Data Systems (Private) Limited
14­Y, Johar Road
Markaz F­8
Islamabad.

The offices are geographically positioned in such a way that the 
head   office   covers   the   southern   region   of   the   country   while 
branch   offices   cover   the   northern   region   of   the   country.   In 
particular, the Karachi office covers the provinces of Sindh and 

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Baluchistan; the Lahore office provides support and services to 
middle and southern Punjab province, i.e. cities of Faisalabad, 
Lahore, Multan, etc.; and the Islamabad office provides support 
and   services   to   the   northern   Punjab,   Islamabad,   NWFP,   and 
Azad Kashmir.

3.3 ORGANIZATIONAL HIERARCHY

The company’s board of directors consists of four directors, as 
named below:

1. Mr. Balall Yaqub (Chief Executive)
2. Mr. Azam Sultan
3. Mr. Amir S. Chinoy 
4. Mr. Mustapha Chinoy

The   Karachi   and   Islamabad   offices   are   each   headed   by   a 

General Manager, whereas the Lahore office is led by a Resident 
Manager.   The   organizational   hierarchy   at   each   of   these   three 
offices is given at Appendix­1.

3.4 PRINCIPALS

The   following   manufacturers   of   computer   hardware,   software 

and networking products are ABM’s principals:

• Artisoft Inc.
• AST Research Inc.
• COGNOS Inc.
• Colorado Memory Systems
• Compaq Computer Corporation
• Data General Corporation
• Gateway Communications Inc.
• Seiko Epson Corporation
• TeleVideo Systems Inc.
• Telex Communications Inc.

3.5 PRODUCTS OFFERED

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< Computer systems and peripherals
< Networks
< Projection systems
< Application software

3.6 SERVICES OFFERED

• Installation of computer systems and peripherals

• Preventive   and   corrective   maintenance   services   (on­site 

and in lab.)

• Network design, installation and maintenance

• Software consultancy and development services

• Software training

3.7 RESOURCES

< Human resources
< Test/repair laboratories
< Technical literature
< Parts inventory
< Backup equipment
< Support from head office
< Training and support from principals

3.8 COMMUNICATION CHANNELS

• Written (letters, memoranda etc.)
• Telephone
• Fax
• Email
• BBS (Bulletin Board Service)
• Mass communication media

3.9 MARKET STATUS

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< Acknowledged as one of the leading computer vendors.

< Leading service provider in Pakistan’s IT industry.

< Largest base of contract and warranty customers.

< Authorized repair center in Pakistan for AST, Epson, and 
Compaq products.

< Sole distributor in Pakistan for sale and service of Epson 
products.

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4. ANALYSIS OF THE ORGANIZATION WITH REGARD TO THE 
TOPIC

My analysis in this section is based on the study of Regional 
Office   of   Islamabad   of   ABM’s   Data   Systems   (Pvt)   Limited. 
Management of office is focusing their marketing efforts mainly in the 
following segment:

POTENTIAL MARKET

BUSINESS   USERS   ­   SELLING  BECAUSE THEY ARE 

PRODUCTS   AND   PROVIDING  AUTHORIZED DEALER IN 
SERVICES   FOR   USE   IN   THE  PAKISTAN  FOR AST, EPSON, 
ORGANIZATIONS   OR   TO  AND COMPAQ PRODUCTS.
RESELL.

TARGET MARKET

CUSTOMER TYPE: IN ISLAMABAD THERE ARE A 
NUMBER OF GOVERNMENT 
BIG ORGANIZATIONS/ DEPARTMENTS AND BIG 
GOVERNMENT DEPARTMENTS PRIVATE SECTOR 
ORGANIZATIONS.

ORDER SIZE: BEST BECAUSE 
COMPUTERIZATION IS BEING 
LARGE DONE IN EVERY 
GOVERNMENT AS WELL AS 
PRIVATE SECTOR 
ORGANIZATION AND BEING 
AUTHORIZED DEALER THEY 
CAN EASILY PROVIDE 
PRODUCTS IN TIME.

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LEGAL REQUIREMENTS:

AFTER SALE SERVICE:

AS   PER   GOVERNMENT  THEY HAVE AUTHORIZED 

PROCEDURES   IT   IS   A   LEGAL  REPAIR CENTER IN PAKISTAN 
REQUIREMENT OF PROVIDING  FOR AST, EPSON, AND 
AFTER   SALE   SERVICE   FOR  COMPAQ PRODUCTS
QUALIFYING   AS   SUPPLIER   OF 
PRODUCTS

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FIELD STUDY REPORT         ­  MARKETING THEORY AND PRACTICE  (561)

4.1 WEAKNESSES

4.1.1 NOT   FOCUSING   THEIR   EFFORTS   TOWARDS   A 

GROWING   MARKET   OF   CONSUMERS   IN 
ISLAMABAD.

ABM’s management not focusing their efforts toward a 
growing market of consumers in Islamabad.

4.1.2 LACK OF CUSTOMER AWARENESS THROUGH ADVERTISEMENTS

Many   of   the   customers   of   computer   related   products 

are even unfamiliar with the name of ABM, because of 
ABM’s   inability   to   reach   its   target   market   through 
advertisements.   Some   advertising   has   been  used,   but 
the   message   has   not   been   effectively   conveyed   to   the 
prospective customers.

EJAZ ALAM KHAN ­ H 5279752 MBA # 21

FIELD STUDY REPORT         ­  MARKETING THEORY AND PRACTICE  (561)

4.2 RECOMMENDATIONS

ABM   Management   of   Islamabad   Office   must   also   focus   their 

marketing   efforts   for   consumers   market   because   of   the   following 
reason:

• Business   users   market   is   directly   under   the   control   of 

Karachi Office and Islamabad Office is only dealing as Store 
and Supply Department.

• Distributors of authorized dealers are sources of their money 
generation   but   they   can   not   give   full   performance   due   to 
non­availability of proper test/repair laboratories, training of 
technical staff, guarantee or warranty of equipment.

• Islamabad is a growing market of consumers of computers 
and their peripheral devices as per the following basis:

• Young generation are interested in new technology.
• Education rate is high
• Income­wise better
• Authorized   distributor   provides   easy   access   to   new 
technology.

EJAZ ALAM KHAN ­ H 5279752 MBA # 22

FIELD STUDY REPORT         ­  MARKETING THEORY AND PRACTICE  (561)

APPENDIX ­I

EJAZ ALAM KHAN ­ H 5279752 MBA # 23

FIELD STUDY REPORT         ­  MARKETING THEORY AND PRACTICE  (561)

EJAZ ALAM KHAN ­ H 5279752 MBA # 24